Been There, Tried it: I Opened an ABLE account

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Disclaimer: Been There, Tried it is based upon personal experiences of those who have tried a particular intervention or service. It is NOT medical or financial advice, nor a substitute for professional advice. It is neither an endorsement or opposition to any intervention or service. This is an opinion piece.

While reviewing our financial plan we started to consider opening a trust for our daughter with diagnosed disabilities, to ensure her future needs are met.  We soon discovered that the set-up of a trust is complex enough to require an attorney, with a cost of about $4,000.  Although we will consider this in the future, we learned that one way to start saving now was to open an ABLE account.

What is an ABLE account?
ABLE stands for Achieving a Better Life Experience, which refers to the federal Act that was passed in 2015 that allows states to establish tax-advantaged savings programs for individuals with a disabilities. It allows individuals with disabilities to save money for qualified expenses without being taxed on the earnings.  Some examples of qualified expenses include legal fees, adaptive equipment, housing, health, wellness, education, training and transportation.

How much can be saved?
In 2018, ABLE allows a maximum $15,000 in savings annually without impacting eligibility for government assistance (like SSI) so long as the account doesn’t exceed $100,000.  Family members who might opt to bequeath part of an estate to an individual with a disability or give money as a gift can deposit funds into an ABLE account.

My Experience
The site I found to open the ABLE account boasted that account set-up was easy and would take merely minutes.  They were right – it took about 20 minutes to complete enrollment.

Be Prepared
You’ll need names for those who will have access to the account, along with social security numbers.  If you plan on setting up direct deposit, be prepared to have bank account information (it took me several minutes to search for this mid-application).

Our Plan
When our daughter was born we opened a college saver account for her.  Now that she’s been diagnosed with a disability, we understand that this account might disqualify her for government benefits when she turns 18.  We plan to put those funds into her ABLE account.

Tell Family Members
Let family members know about the ABLE account, and be sure that they have not opened a traditional bank account in your loved one’s name, or have a plan to leave any part of an estate or other monetary gift  that may impact government benefits.



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